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Washington, D.C.’s post-pandemic struggles are no secret. Last summer, the Washington Post’s Paul Schwartzman called the city “a wounded rendition of its once robust self” as many federal and private-sector workers in the region continue to work remotely, either full time or part-time. Ridership on the region’s rail network, the Metro, remains barely half what it was in 2019, causing budget shortfalls for public transit agencies. While ridership was up across the system roughly 40 percent in 2023, that still wasn’t nearly enough. Without those commuters, it is harder to sustain the density of commerce and attractions that make downtowns safe and vibrant. To make matters worse, last year, violent crime rose in the city while it fell nearly everywhere else in America.

Into this maelstrom has stepped Ted Leonsis, the billionaire owner of the NBA’s Washington Wizards and NHL’s Washington Capitals. In recent months, Leonsis has threatened to exacerbate the city’s problems by taking the sports teams out of the city, unless it gives him what he wants: a new stadium.

In December, Virginia’s Republican Gov. Glenn Youngkin announced plans to build a new, $2 billion stadium complex for the Wizards and Capitals in the wealthy D.C. suburb of Alexandria, Virginia, funded largely with public money. Both teams currently play in a perfectly serviceable 27-year-old Chinatown arena in D.C. that Leonsis has deemed inadequate. Perhaps figuring that recent fevered apoplexy about the state of downtown Washington gives him extra leverage, Leonsis has chosen to play Alexandria and D.C. off against each other to get as many public dollars for himself as possible, luring the two municipalities into a race to the bottom. Though the city’s existing problems are very real, D.C., especially, should not fall for it. However painful it might seem in the short run, the District should let the teams walk.

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The question is not whether D.C. has ongoing challenges related to pandemic-era changes in work and living practices, but whether the presence of the Wizards, consistently one of the worst franchises in the NBA, and the Capitals, of the increasingly niche NHL, make much if any difference in this calculus. It is also a matter of whether the teams are worth anywhere near the $500 million counteroffer that D.C. Mayor Muriel Bowser made Leonsis, for upgrades to their existing facility. The last-place Wizards are drawing under 17,000 fans per game for 41 home contests per season, and the Capitals are just a bit higher for the same number of games. Yes, losing the teams would hurt a small number of businesses in the Penn Quarter neighborhood, and of course loyal fans would be justifiably outraged about the move. But we’re talking about a city that despite its recent slump remains a premier global tourist attraction with more than 20 million domestic and 1.3 million international visitors in 2022. There isn’t a major city in North America that relies less on professional sports for its identity or revenue, and D.C.’s coffers, if not its hearts, will be just fine without NHL and NBA franchises.

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Long-time followers of the sports stadium wars know that D.C. is hardly a first of its kind. Pro sports teams owned by moneyed villains squeezing cash-strapped cities for new ballparks and tax breaks is one of America’s enduring storylines. Who could forget the Miami Marlins swindling the taxpayers of South Florida for construction bonds that will ultimately cost the public $2.4 billion—and then conducting a fire sale just one year after their boondoggle of a stadium opened. The Marlins have subsequently ranked last in the National League in attendance, 10 of the past 11 years. Or take the Howard Schultz–owned Seattle Supersonics decamping for the country’s 42nd-largest metro area in Oklahoma City after the good people of coastal Washington refused to float the franchise a half-billion-dollar arena. Or Oakland Athletics owner John Fisher deliberately destroying the team and then splitting for Las Vegas after trying and failing for years to get local politicians to buy him the perfect stadium on the Bay. I could go on, but unlike municipal budgets for fabulously wealthy sports owners, word counts do have limits.

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Why do city councils and state legislatures keep falling for this kind of naked extortion? It certainly isn’t because stadium-building leads to urban renewal or a robust expansion of employment opportunities. More than a quarter century after economists Andrew Zimbalist and Roger Noll published Sports, Jobs and Taxes, which systematically dismantled the boosterist arguments for publicly funded arenas, very little has changed in terms of how we understand the impact of these projects. At best, a new stadium leads to short-term gains in the construction sector and ongoing, poorly paid seasonal work during games and other events. And economists warn about lost opportunities to fund other infrastructure projects, ongoing maintenance costs that require public investment, and the reality that dollars spent at sports complexes are not being spent elsewhere. Zimbalist and Noll’s research powerfully showed how at best, the whole thing is likely a wash. As economists John Charles Bradbury, Dennis Coats, and Brad Humphries declared bluntly in a 2022 journal article, “the large subsidies commonly devoted to constructing professional sports venues are not justified as worthwhile public investments.”

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It’s not just that stadium projects make no economic sense. They also don’t make much sense as acts of popular will. As heartbreaking as fans may find the loss of their teams, the fact is that most people are not fans. The research shows that most people don’t routinely watch or care about professional sports. A recent Pew survey found that 62 percent of Americans follow pro sports “not too closely or not at all.” It is undeniably true that sports are the most watched and talked about events on television, particularly NFL telecasts. But as a number of baseball teams found out the hard way last summer with the collapse of a major regional sports network, a lot of sports largesse is propped up by cable television revenues that involve millions of people who don’t watch sports subsidizing, with their monthly bills, those who do. And an August 2023 Harris poll shows that more than half of respondents believe stadiums should be constructed mostly or entirely with private money.

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But public opinion is complicated, and there may be a sports version of Fenno’s Paradox—the political science finding that people generally like their own representative while disapproving of the job Congress is doing—at work here. Many people might find the idea of subsidizing playgrounds for billionaires and their hired athletes to be repugnant, but also love, for example, their Milwaukee Brewers. Wisconsin’s famously tight-fisted GOP-dominated state legislature greenlit more than half a billion dollars in upgrades for the team’s stadium last year after the Brewers’ ownership threatened to move. The bill was signed enthusiastically by Democratic Gov. Tony Evers, meaning that there was a bipartisan consensus in favor of Milwaukee, one of the smallest markets in professional sports, remaining a major league town. The Brewers, owned by investor Mark Attanasio (personal net worth: $700 million) agreed oh so generously to chip in $150 million.

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Whether the Wizards and Capitals actually move to Virginia is an open question. Youngkin’s plan needs the approval of the state legislature, which is now controlled by Democrats who might see through the artful mix of chicanery and greased-skid forecasting that underlies the $2 billion project. But D.C. may be willing to refurbish the existing arena with mostly public money in order to hold onto the teams. That means that Leonsis and his rich friends win either way. While Alexandria may see a short economic boomlet from its wealthy residents shelling out, without much pain, D.C. could really use that money better elsewhere. Instead of groveling for Leonsis to keep his teams in D.C., the mayor and her legislative allies should maintain their dignity and use that half a billion dollars on something that the city actually needs to address its challenges, like office-to-residential conversions that could help bring down the cost of housing in one of America’s most expensive real estate markets. It could make significant new investments in education and public transit. Cities should never be gullible enough to pony up public treasure for selfish billionaires who could better afford these investments in their businesses themselves. D.C. is no exception.

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QOSHE - D.C. Should Let Its Billionaire Sports Owner Extort Someone Else - David Faris
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D.C. Should Let Its Billionaire Sports Owner Extort Someone Else

5 11
01.02.2024
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Washington, D.C.’s post-pandemic struggles are no secret. Last summer, the Washington Post’s Paul Schwartzman called the city “a wounded rendition of its once robust self” as many federal and private-sector workers in the region continue to work remotely, either full time or part-time. Ridership on the region’s rail network, the Metro, remains barely half what it was in 2019, causing budget shortfalls for public transit agencies. While ridership was up across the system roughly 40 percent in 2023, that still wasn’t nearly enough. Without those commuters, it is harder to sustain the density of commerce and attractions that make downtowns safe and vibrant. To make matters worse, last year, violent crime rose in the city while it fell nearly everywhere else in America.

Into this maelstrom has stepped Ted Leonsis, the billionaire owner of the NBA’s Washington Wizards and NHL’s Washington Capitals. In recent months, Leonsis has threatened to exacerbate the city’s problems by taking the sports teams out of the city, unless it gives him what he wants: a new stadium.

In December, Virginia’s Republican Gov. Glenn Youngkin announced plans to build a new, $2 billion stadium complex for the Wizards and Capitals in the wealthy D.C. suburb of Alexandria, Virginia, funded largely with public money. Both teams currently play in a perfectly serviceable 27-year-old Chinatown arena in D.C. that Leonsis has deemed inadequate. Perhaps figuring that recent fevered apoplexy about the state of downtown Washington gives him extra leverage, Leonsis has chosen to play Alexandria and D.C. off against each other to get as many public dollars for himself as possible, luring the two municipalities into a race to the bottom. Though the city’s existing problems are very real, D.C., especially, should not fall for it. However painful it might seem in the short run, the District should let the teams walk.

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The question is not whether D.C. has ongoing challenges related to pandemic-era changes in work and living practices, but whether the presence of the Wizards, consistently one of the worst franchises in the NBA, and the Capitals, of the increasingly niche NHL, make much if any difference in this calculus. It is also a matter of whether the teams are worth........

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